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Texas Ethics Commission

Still grappling with how to handle sexual harassment claims

I like the idea of putting the authority to investigate harassment claims in the Legislature into an independent body.

Calls for independence between sexual misconduct investigations and those in power have grown in recent months, and experts and several lawmakers agree that impartiality is crucial for building trust in a reporting system at the Capitol, where repercussions for elected officials are virtually nonexistent. But efforts to establish that independence — which could require officeholders to give up their current oversight over investigations — will likely face political challenges in persuading lawmakers to hand over power to a third party.

Any independent entity investigating sexual misconduct at the Capitol would need the power to truly hold elected officials accountable, several lawmakers and legal experts said. That could mean sanctions against officeholders that their colleagues may be unlikely to pursue.

“It cannot be officeholders policing officeholders,” said state Sen. Sylvia Garcia, D-Houston, who is among those calling for an independent investigative agency.

[…]

But to alleviate concerns with existing reporting procedures that leave investigations in the hands of elected officials, lawmakers have proposed several ways to establish what they say is needed independence in investigations. Those proposals range from a review panel that doesn’t include lawmakers to a new state entity comparable to the Texas Ethics Commission, which regulates political activities and spending.

The creation of an independent investigative body “is a necessary immediate step” for the Legislature to address skepticism in the current reporting system set up for sexual harassment victims, said Chris Kaiser, director of public policy and general counsel for the Texas Association Against Sexual Assault.

“I don’t think that you have to impugn the work that any investigators are doing currently to accept the fact that that skepticism itself is preventing people from coming forward,” Kaiser said. “It’s really clear the Legislature has a lot of work to do to build trust.”

See here and here for some background. I will just say, if there is an independent body to handle these complaints, it has to be truly independent, by which I mean free from any legislative authority or meddling. I mean, the Texas Ethics Commission is an independent body, but it’s hardly a good role model for this sort of thing. I have a hard time imagining that happening, but if there’s enough of a shakeup in the composition of the Lege, there might be a chance. First and foremost, it needs to be an issue in the campaigns. I’m asking every candidate I interview about harassment and the institutional policies that deal with it. The more we talk about it, the better.

More on the Paxton bribery investigation

It’s good to have rich friends.

Best mugshot ever

Attorney General Ken Paxton says the man who shelled out the most money to help him combat securities fraud charges is a “family friend,” but a review of campaign finance records show his main financier is also a major Republican donor for candidates up and down the ticket.

In a little more than a decade, Preferred Imaging CEO James Webb has given nearly $1 million to Republican candidates, including a $100,000 gift to Paxton to help fund his legal defense fund. The year after he gave his gift, the attorney general’s office agreed to a $3.5 million settlement after investigating his company for Medicare fraud.

Now Webb and his gift are at the center of the latest investigation into Paxton’s personal dealings, sparking a probe by the Kaufman County district attorney, confirmed an investigator at the agency.

Mike Holley, who is handling the case, said the DA will announce in the coming weeks whether the office will bring charges that Paxton violated the state’s bribery and corrupt influence laws by taking money from someone whose company was under investigation.

[…]

Webb, of Frisco, is a former law client of Paxton’s, according to Welch. Paxton participated at Webb’s wedding, he added, but declined to provide further details or pictures.

Webb has been a regular campaign contributor of Paxton’s for years. He gave him his first political donation in 2013 when the Republican from McKinney was running for attorney general, according to campaign finance records. He has contributed heavily to other Republican candidates’ political campaigns since then.

In total, he has given $896,800 to Republican candidates’ political coffers since 2006, according to a review of campaign finance records. Webb ponied up the most – $496,000 – for the 2014 election when voters swept Republican Gov. Greg Abbott, Lt. Gov. Dan Patrick and Paxton into office.

The wealthy CEO has helped fuel all their campaigns, but gave the most to Paxton. Webb contributed $300,000 when Paxton was running for attorney general although he also give tens of thousands of dollars to Dallas area state representatives and hopefuls that election cycle.

[…]

The investigation is focused on whether Paxton violated the state’s bribery and corrupt influence penal code, said Holley, an investigator in the Kaufman County district attorney’s office handling the case. However, the investigation could turn up wrongdoing by other actors, he said.

Kaufman County District Attorney Erleigh Norville Wiley is expected to announce this fall whether the investigation has warranted new charges, she said.

See here for the background. Again, I don’t really expect anything to come out of the Kaufman County investigation, but if something does, that would be amazing. For one thing, it might be difficult to fit this story into the “Paxton haters are out to get me!” narrative he’s been spinning, but I’m sure his attorneys are up to the task. Of course, those attorneys will still have to be paid, and he’ll have one fewer sugar daddies to tap for that. Life is hard, you know? But we’re getting ahead of ourselves. Keep some popcorn handy as we wait to see how this plays out.

Paxton being investigated for bribery

Sounds sexy, but don’t get too excited just yet.

Best mugshot ever

Attorney General Ken Paxton is being investigated under bribery and corrupt-influence laws for accepting a six-figure gift from a CEO whose company was under investigation by the state for fraud, the district attorney leading the probe confirmed Thursday.

In July 2016, Austin-based medical device company Preferred Imaging LLC agreed to pay a $3.5 million settlement after a multiyear Medicaid and Medicare fraud investigation. The year before, Preferred Imaging CEO James Webb had given $100,000 to help Paxton fight criminal fraud charges the attorney general has been battling since July 2015.

On Thursday, Kaufman County District Attorney Erleigh Wiley confirmed to The Dallas Morning News that she has been investigating whether Paxton broke state laws that put limits on gifts public servants can receive from people “subject to [their] jurisdiction.”

“There is an active investigation looking into that matter,” Wiley told The News. “We are carefully and thoroughly going through every piece of evidence.”

The complaint that led to the investigation was originally made to the Texas Rangers by the attorney of the same whistleblower that launched the probe into Preferred Imaging. Instead of appointing a special prosecutor to investigate, Wiley took it over at the behest of the regional administrative judge.

Wiley, a Republican, added she was close to deciding whether to send the case to a grand jury and said she’s received “great cooperation” from both the Texas Rangers and Paxton’s legal team.

[…]

To help pay for his lawyers, Paxton set up a legal defense fund in 2015. In its first year, he raised $330,000 from friends, family and business associates.

He listed the amounts under the “gifts” section of his annual financial disclosures, and last year, added this note to the end of the form: “All gifts for legal defense were conferred and accepted on account of a personal, professional, or business relationship independent of General Paxton’s official status.”

Webb’s 2015 donation was the largest single gift to Paxton’s legal defense fund. He did not contribute last year.

Texas’ bribery laws prohibit elected officials from taking “any benefit from a person the public servant knows to be subject to regulation, inspection, or investigation by the public servant or his agency.” Excepted are gifts “conferred on account of kinship or a personal, professional, or business relationship independent of the official status of the recipient.”

The Texas Ethics Commission has not signed off on elected officials receiving donations that aren’t campaign-related from out-of-state friends and business associates. In 2016, it punted a request to sign off on such an arrangement made by an anonymous official in Paxton’s agency.

It’s a long story and kid of hard to summarize, so go read it and see what you think. I think this is unlikely to turn into an indictment, but perhaps there’s more to it than it appears. If it does, I’m sure Paxton and his squadron of defense attorneys will find a way to claim it’s another partisan witch hunt, despite Kaufman County being more Republican than Collin. We’ll see how it goes. The Trib and the Chron have more.

Someone really doesn’t like the Paxton case judge

It’s dirty tricks time.

Best mugshot ever

An anonymous campaign-like piece of mail has begun appearing in Texas attacking the judge overseeing Attorney General Ken Paxton’s criminal securities fraud trial, discrediting the Tarrant County jurist who has said he plans to stay with the case as it moves to Houston this fall.

The sepia tone flier that alleges state District Judge George Gallagher’s court is “rigged against Texas” comes as Paxton fights to remove the judge from the bench overseeing his case.

“It’s definitely done with the goal of affecting the Paxton case,” said Mark Jones, a political scientist at Rice University, citing Gallagher’s next election is three years away. “It’s probably an attempt to either get Gallagher to resign from the case or to begin to affect the jury pool.”

[…]

First reported by the Fort Worth Star-Telegram, the mailer has been sighted in Tarrant County and elsewhere in the state.

Absent from the flier is a reference to who sent it, which is information required on political mailers that advocate people “vote for,” “elect,” “support,” “defeat” or “reject” a candidate or proposition. The flier uses none of those words, nor does it encourage people take a specific action.

“The general guideline is that political advertising that includes an express advocacy has to include a disclosure statement,” said Ian Steusloff, general counsel for the Texas Ethics Commission, which examines complaints about political mailers. He declined to comment on whether the anonymous mailer is legal and said he cannot comment on whether the agency has received a complaint on the flier.

The mailer alleges Gallagher is “trying to Fix” the attorney general’s trial and cites a series of rulings by the 2nd and 7th Courts of Appeals dating to 2003 saying he “abused” his discretion.

Empower Texans, a conservative Republican group, embraced the message of the flier, but denied it had any involvement with it.

“The Paxton prosecution is a travesty and an embarrassment to the Texas criminal justice system. Whatever the source, Gallagher deserves the criticism he is receiving for his role in it,” read an essay from Michael Quinn Sullivan, president of the conservative group and defender of Paxton.

Yes, I’m sure those upstanding citizens at Empower Texans have nothing at all to do with this, and you can’t prove that they did. There’s a reason why they fight like crazed wolverines against any attempt to increase disclosure requirements. Bud Kennedy has a partial image of one of the flyers, which is right out of the ominous-voiceover-TV-attack-ad school. I doubt even these jokers would try to blanket the county with their lame hit pieces, but keep an eye on your mailboxes anyway. Why they think the judge is the root of Ken Paxton’s problems is beyond me, but they do have an investment to protect so here we are. The Press, which has further images of the mailer and some context to the BS charges it raises, has more.

This week in Ken Paxton Dishonesty

What else has he been lying about?

Best mugshot ever

Best mugshot ever

Ken Paxton told federal investigators a tech CEO gave him $100,000 worth of stock five years ago, but he never disclosed the shares as either a gift or income, an issue ethics experts agreed could spell more trouble for the attorney general already facing state and federal fraud charges.

According to federal fraud charges filed against Paxton last month, the embattled first-term Republican AG told investigators from the U.S. Securities and Exchange Commission that in 2011 he was given 100,000 shares of stock in the North Texas tech startup Servergy by the firm’s then-CEO Bill Mapp.

While Paxton said he intended to invest in the company and pay for the shares, Mapp allegedly wouldn’t accept, telling him during a meeting at a McKinney Dairy Queen that “God doesn’t want me to take your money,” according to the SEC charges.

“Consequently, Paxton claims, he later accepted the shares as a gift,” the charges added. Yet Paxton, who was a state representative at the time, never disclosed the stock as a gift on annual personal financial statements elected officials are required to file with the state.

Federal investigators doubt the shares were given as a gift, instead alleging Mapp handed over the stock to Paxton as a “sales commission” for convincing other people to invest in his company.

[…]

State law says elected officials who receive a gift worth more than $250 must disclose it on the “gifts” section of their annual personal financial statements. On his 2011 statement, Paxton for the first time disclosed that he held 10,000 or more shares in Servergy.

He did not also list the shares in the “gifts” section.

Several ethics experts said if an elected official receives stock as a gift, they must disclose the shares in both the “gifts” and “stock” sections on the personal financial statement. The gift section, unlike the stock section, requires the official to divulge the name of the donor.

The only exceptions to this disclosure rule, according to state law, are for gifts that come from a relative by blood or marriage within two degrees, political contributions or lobbyist expenditures.

“It specifically requires that a gift be reported if it is in excess of $250,” said Tim Sorrells, a private practice attorney who served as the general counsel of the Texas Ethics Commission for a dozen years. Renea Hicks, an Austin attorney who specializes in ethics issues, added, “If it was a gift, it seems obvious to me it would have to be listed in the gifts section.”

Paxton did not list the stock under the “gifts” section of his personal financial statement that year or in any year since.

See here and here for some background. This, again, is why Paxton is writing legally meaningless threat letters to Target about bathrooms. It’s all to keep his core supporters focused on the things they like, and not on these unpleasant little allegations about Paxton’s utter lack of moral character. A scoundrel’s gotta do what a scoundrel’s gotta do.

One more thing:

The Texas Ethics Commission can fine someone who breaks disclosure laws $5,000 or three times the amount at issue. Criminal charges for perjury or making false statements would also be possible, said former assistant attorney general Fred Lewis. Failing to file a personal financial statement correctly in accordance with state law is a Class B misdemeanor.

Progress Texas? Texans for Public Justice? This is your cue.

Oh, Borris

Not good.

Borris Miles

Borris Miles

State Rep. Borris Miles, a Houston Democrat, repeatedly failed to disclose his business interests in three companies as state law requires.

The lawmaker did not report on state ethics forms for several years that he had an ownership stake in two hospice agencies or that he owned an entertainment company that operates a cigar bar in south Houston.

Miles rectified these omissions in recent days after the Houston Chronicle inquired about them. Through his attorney, he filed “corrected” ethics statements and “good-faith” affidavits in which he says, “I swear, or affirm, that any error or omission in the report as originally filed was made in good faith.”

On the new forms, Miles disclosed that he had business interests in Attentive Hospice from 2012 through 2015, in A-1 Hospice of Houston in 2009, and in Goodlife Management from 2009 through 2013.

Ethics watchdogs consider Texas’ ethics act weak but say its requirement that lawmakers, other public officials and candidates disclose business ownership can enable the public to determine whether they are engaged in conflicts of interest.

And when they don’t disclose? Craig McDonald, director of the nonprofit Texans for Public Justice, said public officials rarely are punished sufficiently for failing to properly report.

“When the minimum disclosure standards that we have are violated, we need tougher and swifter penalties for it,” he said. “It’s a lack of enforcement. That comes from an unwillingness among legislators to regulate themselves with respect to transparency on their finances.”

The penalty for failing to file required items on the ethics statements ranges from $500 to $10,000 if the Texas Ethics Commission takes action under its rules. If a sworn complaint is filed alleging a violation, the commission can order a fine up to $5,000 or triple the amount at issue, whichever is more. A prosecutor also can pursue a misdemeanor charge.

The issue of whether Miles should be sanctioned for not initially disclosing three of his business interests highlights flaws with the ethics law, said Tom “Smitty” Smith, director of the Texas office of Public Citizen, a nonprofit watchdog group.

The state ethics commission doesn’t audit personal financial statements filed by public officials and candidates to track whether they disclose everything about their businesses, he said. “And we don’t prosecute them for their failure to fully disclose,” Smith added. “As a result, people can blatantly ignore the personal financial statement requirements and there’s really no consequence except for a fine that is less than the rounding error on the business income at question.”

I like Rep. Miles and I hate to have to write about this stuff, but our disclosure requirements are woefully inadequate enough as it is, and there’s no excuse for this. It would help if the Legislature got around to creating real penalties for failing to comply with these requirements – Greg Abbott has paid lip service to this, but failed quite miserably in the last session to achieve anything – but even in the absence of penalties that sting, compliance is not optional. If someone wants to file a complaint over this with the TEC and/or the Harris County DA, that’s their right, and Rep. Miles will need to face whatever consequences follow from that. In the meantime, I hope everyone else is reviewing their own disclosure statements and bringing them into compliance if they are not fully there. I also hope the Lege revisits the issue of penalties for non-compliance. In effect, the Legislature has the power to oversee itself, since they have the power to grant or rescind oversight authority to the TEC. Let’s take that job a bit more seriously, shall we?

The Rodeo had an extra clown this year

OK, it was a rodeo in Mississippi, but I wasn’t going to ruin a good headline. The point is, that clown’s name was Sid Miller.

Sid Miller

Texas Agriculture Commissioner Sid Miller used a combination of taxpayer money and campaign funds to fly to Mississippi last year to compete in a rodeo for prize money, according to newly obtained records.

Miller spent nearly $2,000 in state and campaign cash on the three-day trip to Jackson, Miss., in February 2015, in the middle of last year’s legislative session, records show. He used an agriculture department credit card for the airplane flights and a campaign account card for a hotel room and a rental car.

Weeks later, he wrote a check from his campaign account to reimburse the state for the flights, according to department records.

During the trip, Miller spent two days competing in calf-roping events at the horse show at the Dixie National Rodeo, according to the Mississippi Quarter Horse Association. He won $880.

Miller did not have any scheduled meetings or events other than the horse show, according to his calendar.

“It was a personal trip so he could compete in a rodeo,” Texas Department of Agriculture spokeswoman Lucy Nashed said.

State law prohibits officeholders from using state money or campaign funds for travel that is primarily personal in nature.

Miller said the trip did not violate the law.

The agriculture commissioner acknowledged that he decided to go to Mississippi so he could compete in the horse show but said that after making that plan, he tried to set up a work meeting. He said he paid for the airplane flights with state money because he thought the meeting would happen but acknowledged it never actually was scheduled.

It was still a justifiable campaign expense, Miller said, because while at the horse show he spoke with the Mississippi agriculture commissioner and several rodeo participants and vendors who had donated to his campaign.

[…]

Ethics experts said the trip would be problematic if Miller benefited personally from state money or campaign donations.

Ross Fischer, a former Texas Ethics Commission chairman, pointed to a 1996 commission ruling that politicians cannot use even campaign money “if the primary purpose of the trip is personal.”

Buck Wood, a former state elections official, said “the fact that he ran into some people at the rodeo does not change the fact that the purpose of the trip was to compete in a rodeo.”

As noted later in the story, Miller’s office did not initially release emails relating to this trip, just as they did not originally release emails relating to his illicit trip to Oklahoma, for which a complaint has been filed. It was only later, when a more specific request that included references to the Mississippi rodeo was filed that they coughed up these emails. At this point, we have to conclude that there is a pattern of behavior here, and that Miller just can’t help himself. He’s a grifter, he’s using this office to live his best life, and what are you going to do about it? It would be nice if someone were to ask Greg Abbott, Dan Patrick, and Ken Paxton that question, and it would be even nicer if one of them deigned to reply. Trail Blazers has more.

Abbott lies about vote fraud

Ross Ramsay calls him out for it, much more politely than I would have.

Not Greg Abbott

Once a consigliere, always a consigliere

The governor of Texas thinks that fraud in the electoral system that put him and others in office is “rampant.”

He can’t back that up.

Greg Abbott was asked on Monday what he thought about President Obama’s throwdown last week on the state’s lousy voter turnout.

“The folks who are governing the good state of Texas aren’t interested in having more people participate,” the president told The Texas Tribune’s Evan Smith at South by Southwest Interactive.

The chief of those “folks” would rather limit turnout than expand on what he seems to think is an election system that has run off the side of the road.

[…]

Strong word, rampant. The handy office thesaurus offers these synonyms: uncontrolled, unrestrained, unchecked, unbridled, widespread; out of control, out of hand, rife.

Does three cases of fraud for every 1 million votes strike you as “unbridled?”

[…]

A study done by News21, an investigative journalism project at Arizona State University, looked at open records from Texas and other states for the years 2000-2011 and found 104 cases of voter fraud had been alleged in Texas over that decade.

Chew on this: If you only count the Texans who voted in November general elections — skipping Democratic and Republican primaries and also special and constitutional elections — 35.8 million people voted during the period covered by the ASU study.

They found 104 cases of voter fraud among 35.8 million votes cast. That’s fewer than three glitches per 1 million votes.

As a point of comparison, Ramsay notes that the Texas Ethics Commission resolved 227 complaints through agreed orders out of over 500 complaints filed during the 2013-2014 biennium. That’s more than twice as many ethics complaints resolved, in two years, as there were allegations – not convictions, but allegations of voter fraud over more than a decade.

But it’s even worse than that. In this Trib story from the say before, about Abbott dismissing President Obama’s criticism about Texas’ abysmal rate of turnout and the resistance people like Greg Abbott have to doing anything about it, we find even more stark numbers:

“Voters and citizens repeatedly say, ‘Why go vote if we’re going to have corrupt leaders in office?’” Abbott said. “So we need to root out and eliminate corrupt leaders and root out and eliminate corruption in the voting process, and that means greater ballot security, not less ballot security.”

Abbott noted that he personally prosecuted voter fraud cases “across the entire state of Texas” while he was the state’s attorney general from 2002 to 2015.

Voter fraud remains by many accounts a rare phenomenon in Texas.

“You’re more likely to get struck by lightning in Texas than to find any kind of voter fraud,” U.S. Sen. Cory Booker, D-New Jersey, said last year, an assertion that PolitiFact found to be true.

As of last year, there had been a total of 85 election fraud prosecutions resolved in Texas, including 51 guilty or no contest pleas and 9 convictions, according to PolitiFact. Lorraine Minnite, a Rutgers professor and author of the book The Myth of Voter Fraud, determined that four cases in Texas from 2000 to 2014 involved in-person voter fraud.

Emphasis mine. Let’s put that in a bit more context:


Year     Turnout
================
2000   6,407,637
2002   4,553,979
2004   7,410,765
2006   4,399,068
2008   8,077,795
2010   4,979,870
2012   7,993,851
2014   4,727,208

Total 48,550,173

That’s only the November turnout figures, from only the even-numbered years. The total number of in-person vote fraud cases therefore represents one per 12 million votes cast. PolitiFact actually counted the other election totals, and came up with one per 18 million votes. And that’s prosecutions, not convictions; the PolitiFact story doesn’t discuss how those cases were resolved. I mean, you’re more likely to be killed by lightning than to find the kind of “voter fraud” Greg Abbott is so hot and bothered about. So yeah, he’s lying through his teeth. We should be very clear about that.

How is Ken Paxton paying for his defense?

Nobody really knows. Well, nobody who isn’t Ken Paxton, anyway.

Best mugshot ever

Best mugshot ever

How Paxton is paying for his criminal defense — a legal tab estimated to easily exceed a million dollars — is one of the ongoing puzzles in the case against the state’s top lawyer.

Beyond confirming he would not use campaign contributions or taxpayer dollars, which he cannot by law because the case is not related to his public duties, the McKinney Republican has declined to elaborate on how he is covering his legal expenses. Mateja did not respond to a request for comment.

Soliciting donations for a legal defense fund would be difficult without running afoul of the state’s bribery statutes prohibiting elected officials from receiving gifts from individuals or entities subject to their authority, which, in the case of the attorney general’s office, could be quite broad.

Paxton could be footing the bill personally. But it’s unclear whether that is an option for the former lawmaker, who earns about $153,000 a year as attorney general. Prior to taking statewide office in 2014, he served in the Legislature for more than a decade, making a living as a lawyer and investor. His 2015 personal financial statement, filed as a part of required disclosures for state officials, reported a number of business and real estate holdings, including a title company and cellular tower.

It’s tough to get a full picture of Paxton’s finances from the statement, which only requires officials to report broad ranges of assets. But it does indicate he has a number of shares in stocks and mutual funds, as well as business assets that amount to a minimum of $35,000.

If Paxton is unwilling or unable to pay his legal team on his own dime, it leaves him in a difficult spot. He could step down from office, which would free him up to raise money for a defense fund. But Paxton has said he will not resign — and he has so far faced no political pressure to do so.

He may find lawyers sympathetic to his plight willing to offer their services pro bono or at a deep discount. That scenario also seems unlikely. (Mateja did not respond to a question about whether any of Paxton’s legal team had discounted their services.)

“A case like Paxton’s could easily consume most, if not all, of a lawyer’s time. Unless the lawyer is independently wealthy, he or she could simply not afford to undertake such a time-consuming case without being paid significant fees,” said Dallas appellate lawyer Chad Ruback in an email. Ruback estimated that the collective rate for Paxton’s team could exceed $3,000 per hour, with a total fee for his defense easily passing one million dollars.

See here for the background. Is it in poor taste for me to note that Paxton could claim indigency and have an attorney provided for him? I’m sure Collin County will be delighted to help out. If anyone thinks this would be unfair to Paxton, I’d remind you that people have been represented by court-appointed attorneys in capital murder cases. Admittedly, that hasn’t always worked out well for the defendants, but as far as the state of Texas and more than a few appeals court justices are concerned, it was all hunky dory. I’m just saying, there is a way forward here that doesn’t involve murky ethics or potential conflicts of interest.

Once again, I spoke too soon about the Ethics Commission and Ken Paxton

I’ll be damned.

Best mugshot ever

Best mugshot ever

The Texas Ethics Commission declined to pass an opinion that would have said it was okay for Texas Attorney General Ken Paxton to accept out-of-state gifts from donors to help pay the legal costs for his indictment.

At a meeting on Monday, the Texas Ethics Commission voted 4-3 on an opinion that would have interpreted state law to say that public employees in the attorney general’s office can accept out-of-state gifts from donors as long as the donors have no ties to Texas or the attorney general’s office. Five votes are required to approve an opinion on the Texas Ethics Commission, so the opinion failed to pass.

Texas Ethics Commission Chairman Paul Hobby said the process worked and he would not entertain another motion to pass the opinion.

Paxton could still seek out-of-state donors to help pay his legal fees. The opinion would not have settled the debate once and for all. Opinions from the Texas Ethics Commission are merely interruptions of state law and a defense from prosecution.

[…]

Hobby said banning an attorney general employee from taking out-of-state gifts would go beyond the authority of the Texas Ethics Commission.

“The legislature has prohibited certain things. In the premise of free society, all things are legal till they are not,” Hobby said. “For us to amend the statute and add those words where they don’t exist…that is beyond interpretation.”

See here for the origin story. This is the second time that the TEC has backed off issuing an opinion that would have suggested that out of state donors could contribute to a legal defense fund for Paxton, each time coming on the heels of a draft opinion to that effect. As noted, these opinions don’t carry the weight of law, and Paxton can go ahead and solicit donations to pay his lawyers anyway, but now if a complaint is filed he can’t point to the TEC and say “hey, they think it’s legal”. The best answer is for the Lege to pass a bill clarifying the existing laws and closing this loophole. If Greg Abbott cares as much about ethics reform as he claims to, he should support that. I look forward to someone filing a bill to that effect and seeing what happens. The Trib has more.

Paxton can get some help with his legal bills

With some conditions attached, for whatever that’s worth.

Best mugshot ever

Best mugshot ever

Indicted Attorney General Ken Paxton could tap out-of-state supporters to pay his legal defense team but must ensure those funds have not been funneled from any Texas donors, according to a draft advisory opinion from the state’s ethics regulator.

The Texas Ethics Commission is scheduled to vote Monday on legal guidance that would give Paxton, or any employee in the attorney general’s office, the green light to accept gifts from some donors.

If approved, it would clear the way for the embattled attorney general to accept contributions to cover his legal expenses from out-of-state donors, with certain conditions.

State law prohibits agency officials from accepting a “benefit” from someone under the agency’s oversight.

However, the ethics commission has said situations exist in which Paxton and his employees could accept gifts – namely from an out-of-state donor with no pending matters before the attorney general’s office – but that safeguards would have to put in place to prevent potential conflicts of interest.

The draft opinion for the first time addresses the possibility of money bundling and suggests heightened disclosure for gifts to employees of the attorney general’s office to avoid the perception of corruption.

[…]

“We do not think that a person who is subject to the jurisdiction of a public servant or a law enforcement agency can evade the restrictions … using another person as a conduit for making a gift to the public servant (e.g., by giving a benefit to another with the instructions that the benefit then be passed to the public servant),” commission staff wrote in a draft opinion released this week. “Similarly, the public servant would be prohibited from accepting a benefit if the public servant knows that the true source of the benefit is a person who is subject to the jurisdiction of the public servant.”

The draft also proposes a set of “best practices” for disclosure, including recommendations that any such gift, along with its source, value and a description, be revealed publicly within 30 days.

A “diligent inquiry” also would have to be performed by whomever receives a gift to make sure the donor has no connection to Texas and is not under the attorney general’s jurisdiction. That inquiry, according to the latest draft, also would need to verify that the out-of-state donor “is not operating as a conduit” for someone else.

Watchdog groups reacted with swift criticism, saying the latest proposal invites the potential for an already-indicted attorney general to put a “for-sale sign on the AG’s office to pay for his criminal defense.”

“A close reading suggests that the commission has qualms about this convoluted ethical blank check,” said Craig McDonald, director of the left-leaning watchdog group Texans for Public Justice, which has filed multiple criminal complaints against Paxton, including one related to his current indictments. “The opinion should have been written in one word: No!”

See here, here, and here for the background. I agree that the best answer is “No”, and it would be for the Governor or Lt. Governor, but apparently the law that specifies no gifts for them does not include the AG. So let’s make sure that someone files a bill to correct that oversight in 2017. Greg Abbott has claimed he’s all about ethics reform, despite his lack of leadership on the issue last session. Let’s see where he stands on this.

Ethics Commission backs off on letting others pay Paxton’s legal bills

Sorry, Kenny.

Best mugshot ever

Best mugshot ever

State regulators punted Monday on guidance that would clear the way for recently-indicted Attorney General Ken Paxton to accept money as a gift from out-of-state donors to finance his legal defense of felony securities fraud charges.

After a brief discussion, the Texas Ethics Commission opted to create a subcommittee to study further how to craft a legal opinion that says out-state donors are allowed to provide a gift to an employee of the attorney general’s office.

Several commissioners said they were concerned that a big dollar out-of-state gift is still intrinsically political — and could come with the potential for trying to sway influence at an office like the attorney general.

Commissioner Wilhelmina Delco said the public would automatically assume that a large monetary gift would come with strings allowing the gift giver to say: “now remember that money I gave you.”

“You just don’t walk up to somebody on the street and hand them $1 million,” she said.

Commissioner Tom Ramsay said he could not understand how someone “could be uninterested” from a political perspective “and write a check for $1 million.”

See here and here for the background. Clearly, I spoke too soon yesterday when I said Paxton was now on Easy Street as far as paying his legal bills was concerned. As the story notes, there was support for the original draft opinion, but at the meeting yesterday the Commission was persuaded to study the issue more in committee. I am sympathetic to the notion that public officials ought to be able to receive some gifts, but this was very much a bridge too far. I’m no expert in what state law allows or forbids, but if the TEC wants some guidance on this, pretty much every public corporation in existence has some kind of allowable-gift guides for its employees, in particular those in positions where decisions with major financial ramifications are made. Surely there are some best practices that can be followed there. Trail Blazers has more.

Paxton can get others to pay his legal bills

It’s Christmas in November for our felonious Attorney General.

Best mugshot ever

Best mugshot ever

Texas’ ethics regulator has carved a path for Attorney General Ken Paxton to tap out-of-state donors to pay his legal tab to defend against felony fraud charges.

The Texas Ethics Commission, responding to an inquiry from an anonymous employee at the attorney general’s office, is scheduled Monday to offer guidance for workers at the agency that could have big implications for how Paxton funds his team of lawyers.

A draft opinion circulated ahead of the meeting lays out proposed steps for an employee of the attorney general’s office to take to avoid violating the state’s gift-giving laws while accepting a “benefit” from a donor in certain situations.

The regulators’ preliminary finding: A state worker could accept a benefit from a donor lacking ties to Texas, like residency or business operations, and who is not believed to be subject to the agency’s jurisdiction.

“We conclude that a public servant working for the OAG would not be prohibited … from accepting a benefit from an individual who does not reside in Texas or from an entity that does not operate in Texas if the donor’s only connection with the jurisdiction of the public servant and the OAG is the act of giving the benefit,” according to a copy of the draft opinion obtained by the San Antonio Express-News.

[…]

Experts have said the ethics commission’s opinion could give Paxton and his lawyers the blueprint to make use of big-money donors for legal services. The bipartisan commission’s eight members are appointed by the governor, lieutenant governor and House speaker.

Whether the attorney general’s office has oversight to regulate or investigate a donor is key to the inquiry. The agency’s jurisdiction is broad, and ranges from defending the state in court to enforcing antitrust laws.

State law prevents an official at an agency like the attorney general’s office from accepting a “benefit” from someone under the agency’s authority.

Lawyers for the anonymous official at the attorney general’s office asked the ethics commission to issue an opinion to clarify a slightly different question: Under what condition could a specific set of out-of-state donors provide a benefit if they were not believed to be subject to regulation or investigation by the agency?

The commission, in its draft, recommended the employee at the attorney general’s office conduct his or her own “diligent” internal analysis of specific facts to avoid conflicts – one that examines pending or contemplated litigation, business records and information directly from the donor. But the draft opinion cautions that “the extent of any necessary inquiry will depend upon what the public servant knows or suspects about the potential donor.”

The eight-member panel of ethics regulators is scheduled to vet the draft opinion for the first time Monday, when a vote could also be taken to adopt the guidance. A copy was circulated ahead of the meeting.

See here for the background. The person who requested this opinion from the TEC is anonymous, and if you believe it’s not Ken Paxton or someone acting on his behalf, then I have some oceanfront property in Midland to sell you. What could possibly go wrong by allowing Ken Paxton’s legal defense to be sponsored by various out of state benefactors who we all pinky-swear have no business in Texas that might possibly fall under the purview of the OAG? Pretty sweet deal, I tell you what. Hope your overlords get their money’s worth from your attorneys, Kenny.

UPDATE: Looks like I spoke too soon on this. Bad for Paxton, good for the rest of us. I’ll do a separate post on this.

Reynolds receives jail sentence in barratry case

He got the max for the misdemeanor charge on which he was convicted.

Rep. Ron Reynolds

State Rep. Ron Reynolds could spend up to a year in jail after he was sentenced Monday to the maximum penalty following his conviction on charges arising from what prosecutors called an “ambulance chasing for profit” scheme.

A Montgomery County jury sentenced Reynolds to up to 12 months in jail and a $20,000 fine following the attorney’s conviction last week on five counts of misdemeanor barratry, or illegally soliciting clients.

The Missouri City Democrat showed no emotion as County Court-at-Law Judge Mary Ann Turner read the sentence late Monday. He took off his suit jacket and tie and handed it to a friend, and gave his cellphone and watch to his wife. Then he was escorted from the courtroom by deputies and taken to county jail.

The sentence comes as Reynolds, the first African-American since Reconstruction elected to the Texas House from Fort Bend County, was starting to campaign for a fourth term. The misdemeanor convictions don’t require him to give up his seat, but deal a blow to his political and legal careers.

Reynolds’ attorney said he intends to appeal, and the court scheduled a hearing for Tuesday on his request to remain free pending that appeal.

See here for the background. You know how I feel about this, so let me just note that a lot of people have called for our indicted Attorney General to step down from his office. To be sure, the charges hanging over Ken Paxton have had an effect on his ability to do his job, but he’s a long way from seeing a courthouse, much less being convicted of something. If one believes Paxton is unfit to serve, it’s hard to see how one argues in favor of Rep. Reynolds staying in office, and that’s before taking into account the possibility that his jail sentence (if it stands) might overlap with a legislative session. Rep. Reynolds has been barred from practicing law while his appeal is ongoing, which I suspect will put a lot of pressure on him and his family. Again, it brings me no joy to say any of this, but the facts are the facts. The Press has more.

Rep. Ron Reynolds convicted of misdemeanor barratry charge

The word “tawdry” applies to this.

Rep. Ron Reynolds

State Rep. Ron Reynolds was convicted Friday of illegally soliciting clients in an “ambulance chasing for profit” scheme, a verdict that carries the threat of jail time and deals a blow to his political career but won’t require him to leave office.

A Montgomery County jury convicted Reynolds, a Missouri City Democrat, of five counts of misdemeanor barratry after a week-long trial in which he represented himself. He was among eight Houston-area lawyers charged in 2013; Reynolds is the only one who did not accept a plea deal.

A teary-eyed Reynolds hugged his wife after the verdict was read. “I always respect the jury’s verdict. But while I respect it, I disagree. Based on the evidence, it did not show that I ever knowingly accepted a solicited case,” said Reynolds, the first African American elected state representative in Fort Bend County since Reconstruction.

Reynolds said he planned to appeal because he doesn’t believe the law was followed.

See here for the past history, and be sure to read the whole story to see why I described it the way I did. I’ll say again what I’ve said before: I like Rep. Reynolds personally, and I value his service as a State Representative, including and especially his leadership on important issues. It is with no joy that I say it’s time for him to conclude his service in the Legislature so he can straighten out his personal life. However well he has served the people of HD27, it’s time for them to have another choice.

Who can pay for Ken Paxton’s defense?

Paxton himself would like to know, though he doesn’t want you to know that he wants to know.

Best mugshot ever

In mid-July, a law firm representing an unnamed state official asked the Texas Ethics Commission whether it would be legal under state gift-giving laws for its client to receive a “benefit” from a donor if the official “has no reason to believe” the donor is subject to his agency’s oversight.

The firm’s name was redacted from the opinion request, and the anonymous official was described simply as “a public servant who works, in a leadership capacity, for an agency that performs regulatory functions, conducts inspections, and conducts investigations.”

According to the request, the donor has signed a written statement saying he is not subject to the agency’s oversight in any way.

“In addition, the public servant has no actual knowledge that the donor is subject to the regulation, inspection, or investigation by the public servant,” the request said.

Under state law, an official at a regulatory agency that conducts inspections and investigations is forbidden from asking for, accepting or agreeing to accept a benefit if the official knows the giver is subject to the agency’s authority.

Earlier this month, the eight-member ethics commission discussed, but did not adopt, a draft opinion in response to the request. Commissioners said they did not have enough information to determine exactly what the state official knows about the donor.

“This requestor just needs to do it again with more facts and circumstances,” Commission Chairman Paul Hobby said.

[…]

As it relates to Paxton’s specific case, ethics experts said how the commission will respond is complicated by the scope of the office of the attorney general, which handles everything from lawsuits defending the state, antitrust cases targeting illegal business practices and unpaid child support. In effect, virtually every Texan could be subject to the attorney general’s regulation or investigation at some point.

All of Paxton’s biggest donors are wealthy Texans with substantial business interests in the state.

Renea Hicks, an Austin-based lawyer who practices election and ethics law, and former assistant attorney general Fred Lewis, a state ethics expert, said the issue was problematic.

The commission could create a “huge loophole” if it allowed officials to accept donor money to pay for non-campaign related expenses like legal fees, Hicks said.

The attorney general, Lewis said, would need to be careful to show there is not even the appearance of a conflict of interest by refraining from taking money for his legal defense from people with pending or likely business before his office.

“An AG’s desire to collect private donations to pay legal bills and to hire good lawyers to avoid jail might tempt an AG to temper his judgment on his clients’ behalf,” Lewis said. “That is morally wrong, a violation of legal duties, and potentially bribery.”

Yes, please, Mister Anonymous Requester, ask again with some more information so we can better answer your question. The difference between Paxton and Rick Perry, in case you were wondering, is that Perry was indicted for acts that occurred in the course of his duties as Governor. As such, he is allowed by law to use campaign funds to pay his attorneys. Paxton allegedly did what he was indicted for as a private citizen, so pending a friendly TEC ruling he’s on his own. Not that there aren’t people who’d like to help him out, it’s just that right now they can’t. And honestly, I think it ought to stay that way, but we’ll see what the TEC says when and if that “anonymous requester” asks again. Trail Blazers has more.

Paxton recuses himself from lots of regular AG activity

Other people in the AG’s office are doing parts of Ken Paxton’s job because right now he can’t.

Best mugshot ever

The AG’s office has followed agency policy, state rules and laws to screen Paxton from participating in matters where he may have a conflict of interest, wrote Cynthia Meyer, spokeswoman for the Texas Office of the Attorney General, in an email. The office has screened Paxton’s participation in matters pertaining to his pending charges, any of the five law firms that represent him against those charges, and anything involving the State Securities Board or the Texas Ethics Commission, explained Meyer.

“The OAG will revise this screening procedure as needed to continue to avoid any conflicts. Any recusal under this policy is intended to go beyond the letter and spirit of the governing law and rules,” wrote Meyer.

She wrote that when Paxton recuses himself, the appropriate division in the AG’s office keeps handling the matter, and the AG’s authority is delegated to the first assistant AG.

Bill Mateja, one of Paxton’s five criminal defense attorneys, said it makes sense for Paxton to recuse himself.

“That’s a good thing, because what that indicates is that he either has, or may have, or may perceive to have a conflict of interest, and you actually don’t want him presiding over matters in which he may have real or perceived conflicts of interest,” said Mateja, principal in Fish & Richardson in Dallas.

[…]

The AG’s office assists local prosecutors when they ask for help, but Paxton would recuse himself from those matters if they are similar to his own criminal case.

Paxton has also recused himself from matters involving the law firms where his five criminal defense attorneys work.

“We were requested to give him a list of the matters where the attorney general’s office is on the other side,” said Mateja. “I would imagine nearly every person on his legal team has at least one matter that the attorney general’s office is involved in.”

Paxton has also recused himself from matters in which the AG’s office represents the Texas State Securities Board or the Texas Ethics Commission in court. He will also recuse himself from any open records rulings involving either agency.

The Texas State Securities Board enforces Texas securities laws and can bring administrative, civil or criminal cases against people or firms that violate the law. Previously, the securities board sanctioned Paxton in an administrative case for failing to register as an investment adviser representative. One of his criminal charges includes the same allegations.

[…]

The first public indication that Paxton’s criminal case might be affecting his work in the AG’s office came when he recused himself from signing an AG opinion in late September. The opinion request asked if it was legal for a county to reimburse the criminal defense costs of a county commissioner who was indicted for a crime, but found not guilty in a jury trial. The office determined that common law allowed the county to reimburse the expenses in certain situations.

First assistant AG Chip Roy signed the AG’s opinion, not Paxton.

In a Sept. 28 letter explaining his recusal, Paxton wrote that his administration strives to write opinions with a high degree of legal accuracy and “without any hint of impropriety.

“Staff members involved in the opinion process must recuse themselves from matters in which there may exist an actual or perceived conflict of interest,” wrote Paxton.

Roy wrote a Sept. 28 letter to Brown County to explain why he signed the AG opinion.

“Any such recusal is intended to go beyond the letter and spirit of the governing law and rules in order to avoid even the appearance of impropriety and to demonstrate our ongoing commitment to the highest ethical standards,” Roy wrote.

Link via the Trib. We’re in somewhat unfamiliar territory here. Paxton isn’t the first AG to be under indictment, but offhand I have no idea (and the story doesn’t explore the topic) if those other AGs, like Jim Mattox, did something similar. Anyone with a longer memory than I have want to weigh in on that? As for the question of whether this diminution of duties should be a cause for Paxton to resign, as the Lone Star Project urges, I don’t see anything happening on that front unless Paxton is forced into it, and that won’t happen until Republicans start calling for him to step down. Until then, the crass partisan in me is happy to have an indicted (and hopefully soon convicted) felon putting some taint on the statewide GOP brand and perhaps eventually weighing their re-election bids down. You do you, Kenny.

Churches and recall elections

This ought to be interesting.

BagOfMoney

Are Texas churches prohibited from campaigning to recall politicians?

The 5th U.S. Circuit Court of Appeals [weighed] that question Thursday in a case set to clarify if and how a church as a corporate entity can influence the political process of ousting a sitting elected official.

A San Antonio congregation, Faith Outreach International Center, and two Houston churches, Joint Heirs Fellowship Church and the Houston First Church of God, sued Texas last year arguing state election code prevented them from supporting recall efforts in the two cities.

Ordinances to protect gay people passed in both cities in 2013. Upset with those measures, the churches planned to launch coordinated recall movements targeting former San Antonio Mayor Julian Castro, along with the entire City Council at the time, and Houston Mayor Annise Parker.

A lower court tossed the case, ruling the coordinated plans from the churches would have amounted to a “prohibited political contribution” because of their corporate status. The court also said the churches could band together under Texas law and form the equivalent of a state-level super PAC, which is allowed to accept corporate contributions to electioneer without coordinating with a candidate.

The state attorney general’s office has taken the position that there is nothing in state law preventing the churches from spending money in a recall election. Like the lower court, however, the state argues the churches would simply have to register as a super PAC, which is formally called a “direct expenditure only committee.”

“Not every payment of money, or transfer of a thing of value, by a corporation in connection with a recall election is prohibited by” state law, the attorney general’s office argues in a brief. “And the statute permits all the conduct in which Plaintiffs want to engage.”

However, lawyers for the churches have dismissed the idea of registering as any type of PAC and are taking aim at the state’s law banning corporate contributions in recall elections, claiming it infringes on their First Amendment rights.

“This is a very live dispute,” said Jerad Najvar, a campaign finance lawyer representing the three churches. “More issues like this are going to arise in which religious groups are going to want to participate in the political process.”

[…]

Corporations are currently allowed to give to a political action committee that is set up to support or oppose a specific ballot measure. But state election code also “specifies that a corporation is prohibited from making political contributions in connection with a recall election, including the circulation and submission of petitions to call an election.”

Lawyers representing the churches are arguing the two statutes dealing with corporate contributions are unclear.

They also point to a court ruling from a case out of El Paso, in which the former mayor successfully sued a pastor and a church spearheading recall efforts, as part of the “chilling effect” for churches wanting to engage, said Najvar, the lawyer representing the three congregations.

In the El Paso case, a state appeals court reached the conclusion that a corporation engaged in the support of a recall. The court said the church failed to use a political action committee designated for a specific ballot measure.

“As far as Texas law is concerned right now, the courts have already applied what is the law,” Najvar said.

I don’t remember the original filing of this lawsuit, so I don’t have any background to give you. I guess I don’t know why the law makes that distinction for recall elections, and without knowing any more than that it sure does seem like a fair target. Against that, I’m not sure what the problem is with using a PAC, as state law allows. Fortunately, this Press story on the oral arguments gives us some insight.

The hearing [Thursday] largely centered on whether the churches even had standing to bring the suit in the first place.

A lawyer representing the Texas Ethics Commission, which oversees political contributions, argued that the churches’ concerns that they would be breaking the law was actually a moot point. He held that, as long as the churches wouldn’t be making contributions to individual political candidates or officeholders, they could post as many recall promotions on their websites and submit as many petitions as they wanted. “The reason they don’t have standing is because there is no case for controversy,” he said. “It is the commission’s position that it is not going to enforce any provision of the election code in a way that restricts political contributions, as long as they’re not coordinated to a political candidate or officeholder.”

Nevertheless, the churches’ counsel continued to claim the churches faced discrimination, despite the state’s continued promise that everything they wanted to do—on the record, at least—was already allowed under state law. When Jerad Najvar, the attorney arguing on behalf of the churches, continued to press the issue, one Fifth Circuit judge told him, “Your clients can’t take yes for an answer.”

Najvar claimed that the “restrictions” the election code placed on his clients’ ability to promote a recall—which no one else seemed to believe were restrictions—were still content-based speech restrictions. Najvar said he worried that if his clients proceeded with recall efforts, they could still face legal troubles. He cited a 2012 case in El Paso , Cook v. Tom Brown Ministries, in which church officials faced jail time for trying to oust the El Paso mayor. The state, however, more than once reminded Najvar and the court that a 2013 case brought against the commission by Texans for Free Enterprise made the Cook case irrelevant and ensured that the churches’ actions would be deemed legal by the state.

Najvar wouldn’t buy it. “Our clients are very fearful,” Najvar said. “There should be confidence that you can proceed in the democratic process and not be concerned that your actions might somehow put you subject to criminal sanctions.”

Which led one judge to ask, “Isn’t that a little paranoid?”

OK then. It will likely be awhile before we hear back from the court. In the meantime, if you have more familiarity with these issues, please feel free to weigh in.

How will we miss Ken Paxton if he doesn’t go away?

Despite his arrest and indictment, Ken paxton might stick around for awhile.

Best mugshot ever

Using Texas history as a measure, Ken Paxton’s indictment on securities fraud charges may mean he will have to navigate rough political waters if he stays in office pending his day in court.

And even if he should be convicted on the charges unsealed Monday in Collin County, experts say there may be no way to officially force him from office – thanks to a 22-year-old law that prohibits the removal of state officials for acts they committed before they took office.

“The real issue here is whether the attorney general can be effective as the state’s chief legal and law enforcement officer,” said Mark Jones, chairman of Rice University’s political science department and a longtime observer of Texas politics.

[…]

But should Paxton be convicted of the charges, most observers agree, the politics of him remaining in office become much more dicey. Even though conviction of a felony might not otherwise officially disqualify him from holding office, officials said, Paxton would likely face intense pressure to resign from fellow Republicans seeking to avoid any ill-effects on GOP control of state politics.

But impeachment – an official, if seldom-used, route for housecleaning – might not even be available. The reason, officials said Monday, is a 1993 state law that says “an officer in this state may not be removed from office for an act the officer may have committed before the officer’s election to office.”

Exactly what prompted that change in 1993, at a time when ethics reform was an issue after a legislative influence-peddling scandal, remained unclear Monday. Legislative reference files show only that it was part of an update in state government code, including many housekeeping revisions, that was billed as “non-substantive” at the time. Legislative aides said they did not remember any details about the bill that was passed into law.

The acts for which Paxton is charged took place before he became attorney general, officials said.

“That raises an interesting question, because impeachment is the only ability the state has to take someone out of office who doesn’t resign,” said Brandon Rottinghaus, a University of Houston political scientist who recently published a book on executive-branch scandals. “I think that statute would certainly complicate things if it ever came to that.”

For a point of comparison, consider the Tom DeLay case. DeLay was (re)indicted in October of 2005, then went through a long process of trying to get his indictments thrown out, taking his appeal of that all the way to the Court of Criminal Appeals. After all those avenues were finally traveled, he went to trial and was convicted in November of 2010, more than five years later. He then appealed the conviction, and was rewarded when the 3rd Court of Appeals overturned his conviction in September of 2013. The state then appealed that, and the CCA upheld the reversal in October of 2014, finally putting an end to the saga more than nine years after it officially began.

Given that, if Paxton is sufficiently pigheaded (early signs point to Yes, though that may just be standard-issue bravado) and has the money to keep his lawyers busy (more on that in a second), we could have two more statewide elections before this thing wraps up. Paxton could theoretically be in his third term before there’s a final resolution, in which he goes free or goes to jail. The process could take less time if he doesn’t challenge the indictments like DeLay did, if he gets acquitted, or if he (improbably) takes a plea deal. But if we go balls to the wall the whole way, we could be looking at nine years. Pace yourselves on the popcorn, is what I’m saying.

And despite the speculation I’ve seen in various reports that Tea Party types may help force Paxton out because they’re “fed up” with “business as usual” or whatever, please remember that it was the Tea Party that got Paxton elected in the first place, and so far they are standing by their man against those evil liberals in Collin County and the Texas Rangers. Yeah, there’s that one TP dude who expressed some concern about how all this looks. Wake me up when there’s more than one like him.

As for the money issue, as I understand it Paxton can only use his campaign treasury (which has some $2.5 million in it right now) to defend himself against charges for things he did while in office. These charges, of course, long predate his time in office. That should mean Paxton is on his own for the lawyer bills – he can fundraise to help pay them, of course, as anyone else could – but I have a feeling he won’t accept that without some kind of pushback. It’s the TEC that would rule on what he can do with his campaign funds, and who’s afraid of the TEC? For that matter, even if he claims to abide by them, who’s to say Paxton will be scrupulous about it, and not try to funnel some money out of his campaign account without anyone noticing? He doesn’t exactly have a record of honesty here. Keep an eye on the money is my advice. If there is a limiting factor in how long this all might take, it’s Paxton’s ability to keep his lawyers paid.

Paxton’s partner in alleged crime

Meet Fritz Mowery, the man who helped get AG Ken Paxton into trouble.

Ken Paxton

Fritz Mowery was on a mission.

Last April, he tried to convince investment clients to sign backdated forms saying they knew Ken Paxton had received money for referring clients.

In a hearing in March, Mowery said he did it, “because it became an issue with Ken Paxton.”

Paxton, who was sworn in as Texas Attorney General earlier this year, acknowledged in May 2014 that he solicited clients for Mowery without being registered with the state securities board to do that. He described it as an administrative error and paid a fine.

“Mr. Paxton’s deal just seems to be, ‘If I say I’m sorry, everything ought to be OK and it ought to be forgotten,'” said John Sloan, who represented a couple that sued Paxton and Mowery after losing hundreds of thousands of dollars in failed real estate deals. “The problem is the law [passed when] he was in the legislature [that] makes the conduct that he was engaging in a felony.”

[…]

A five-day administrative hearing this past March revealed details about the dealings between the two men. Regulators are seeking to revoke Mowery’s securities license and they allege that he engaged in pattern of misconduct that included misrepresentations, acting in his own self-interest over his clients’, and failing to disclose crucial information to clients.

Testimony showed the two men had been working together as far back 2004, the same year that Mowery founded Mowery Capital Associates.

Paxton was paid 30 percent of management fees for referrals that he made to Mowery.

[…]

But the testimony shows the lengths to which Mowery was going to get clients to sign the backdated disclosures last spring.

In one case, a disclosure was dated as having been signed in 2005. In reality, it wasn’t signed until 2014.

Read the whole thing, it’s quite illuminating. Mowery’s defenders and Paxton’s campaign flack insist that this is all just a big misunderstanding, an innocent mistake that anyone can make, and so on. I think there’s only so many times you can ask people who had no idea that Ken Paxton was getting a kickback when he steered them to Fritz Mowery to sign a backdated form saying that they had been informed up front about the Paxton/Mowery relationship before one is forced to conclude that the behavior was habitual and not accidental. That will presumably be one of the things that the grand jury convening in August will consider, along with whatever evidence of other alleged wrongdoing that the special prosecutors say they have found. As I’ve said, I can’t wait to see how that goes.

In the meantime, you may be wondering about Paxton’s legal bills.

Attorney General Ken Paxton, dogged by a cloud of legal uncertainty since taking office in January, is not using taxpayer dollars to pay his lawyers, according to aides, who left it less clear whether he plans to tap his campaign account.

The question of how he has been footing his legal bills flared up Thursday with the disclosure of campaign finances that showed he spent almost $20,000 on legal services during the first half of the year. A Paxton spokesman indicated the expenses did not have to do with the ongoing fallout from his self-admitted violation of state securities law last year.

A special prosecutor overseeing the latest chapter in the saga has said he plans to ask a Collin County grand jury to indict Paxton on a charge of first-degree felony securities fraud. The grand jury is expected to meet in the next few weeks, and Paxton has hired high-powered Dallas attorney Joe Kendall to represent him.

Before Paxton brought Kendall on board, the attorney general was being represented by Matt Orwig and Bob Webster, two Dallas lawyers whose firms did not show up on Paxton’s most recent campaign finance report. Asked Thursday evening about the legal services listed on the disclosure, Paxton spokesman Anthony Holm said in a statement, “My belief is that none of those are related to the events in Collin County.”

[…]

State law prohibits elected officials from using campaign contributions for personal purposes. One exception, however, is when an elected official is defending a civil or criminal action brought against them in his or her “status as a candidate or officeholder.” Holm has long suggested Paxton is only facing the legal drama because he is a top-ranking elected official, while prosecutors have argued Paxton’s political stature has nothing to do with their work.

The Texas Ethics Commission issued an advisory opinion in 1995 that shed some light on how it interprets the so-called “personal use” exception. A district judge had asked the commission whether he could use campaign contributions to pay for his defense against a lawsuit stemming from his time as an attorney before he joined the court. The commission concluded that judge was in the clear as long as he had determined “in good faith that a groundless lawsuit has been filed against him solely because of his status as a judge.”

Defending oneself against felony charges can be quite expensive, as Rick Perry can attest. It will be very interesting to see if Paxton is allowed to tap into his campaign account for this, or it he’ll have to fundraise separately.

Campaign finance reports may be a bit more interesting this cycle

And by “interesting”, I mean in the Chinese curse sense. From the city’s campaign finance reports page:

BagOfMoney

In April 2015, the Texas Ethics Commission released a new Electronic Filing Application. The changes made have to do with the separation of the types of contributions and political expenditures. Though these changes are minor, they require substantial modification to the databases that facilitate the electronic filings that campaigns will be making.

The Mayor’s Office, City Secretary, Legal Department, and the Houston Information Technology Services Department are working diligently to modify the database in a way that will allow electronic filings that comply with the amended TEC requirements. We do not currently have that database available, and will be providing daily updates to enumerate the status of the database reconstruction. In the meantime, if you intend to file before the deadline of July 15th at 5 p.m., the only current option available will be to file by paper in the City Secretary’s office. To produce a report that will satisfy the requirements enumerated by the TEC, you can go here to file as a local candidate and print the PDF, which you can then submit to the City Secretary’s Office in person, or via email at citysecretary@houstontx.gov. The instructions on how to file are enumerated by the photo set below. The Texas Ethics Commission has also issued detailed instructions and troubleshooting information available here.

Until further notice, the City of Houston will not be enforcing Chapter 18 Sections 18-103 and 18-104.

If you have any questions, you may email Steven David in the Mayor’s Office at steven.david@houstontx.gov, or Danielle Folsom in the Legal Department at danielle.folsom@houstontx.gov.

Otherwise, we will update this site once daily to show the current status of the database and its ability to receive electronic filings.

As of 07.14.2015 at 9:00am, the filing database is not working.

Via Campos, who reports that campaigns were informed about this last Thursday. I don’t know what this will mean exactly from my perspective as someone who examines finance reports and posts them to a webpage, but it definitely looks like they won’t be appearing just yet – usually by this point there are at least a few early filers up, but there has been nada so far this year – and at the very least I’ll have to get used to a new look. On the plus side, it may make it easier to add up the in-kind donations, which as we have discussed may make a current report or two look different than it sounds. We’ll see about that. All I know for now is that I want to see ’em, and I wish this could have gone better. Maybe by the time the 30 day reports are due, I hope.

Paxton involved in another scam

When it rains, it pours.

Ken Paxton

The name of Attorney General Ken Paxton, facing potential indictment by special prosecutors in Collin County for first-degree felony securities fraud, has surfaced in a federal probe of a company in which he is an investor.

The investigation, first reported late Tuesday by the Associated Press, centers on whether McKinney-based Servergy defrauded investors with false claims about the sales of its data servers and their technological capabilities. According to court filings by the U.S. Securities and Exchange Commission, the company is suspected of “potential misstatements” about having preorders for the servers from the online retailer Amazon and the semiconductor giant Freescale — and in assertions that the product needed up to 80 percent less cooling, energy, and space compared to other servers on the market.

Paxton’s email address appears with about 70 other contacts in one list of search terms in a subpoena of Servergy from the SEC. His name is also included in an October 2014 letter from Servergy to the SEC describing the search terms used to produce the documents the company turned over in response to a subpoena.

According to Paxton’s 2014 personal financial statement filed with the Texas Ethics Commission, he owns at least 10,000 shares in the company. The SEC filings do not indicate it is seeking documents involving Paxton or the scores of other investors and additional parties.

You can see the original AP story here. At this point, it’s hard to say what if anything this may amount to, and what if any role Paxton may have played beyond duped investor. He’s been duped before, and there’s no reason to believe he’s learned from the experience. So we’ll see. This has already been a bad year for Ken Paxton. It has the potential to get a whole lot worse.

Ethics complaint filed against Sen. Huffman

From the Lone Star Project:

Sen. Joan Huffman

The Lone Star Project has learned that a complaint was filed Wednesday with the Texas Ethics Commission (TEC) alleging that Republican State Senator Joan Huffman (SD17 – Houston) is in violation of section § 572.023 of the Texas Government Code for failure to disclose a financial interest in 30 business entities controlled by her husband, Keith Lawyer. The complaint can be seen here.

Current Texas law requires state elected officials to report their financial holdings and activities as well as those of their spouses and any dependent children. Also according to the Texas Ethics Commission, a filer must report information about community property on their state disclosure documents—including any businesses formed by a spouse during the marriage. According to the complaint, Huffman has repeatedly failed to disclose her husband’s business interests.

Huffman’s Personal Loophole Amendment

Anyone wondering why Joan Huffman filed an amendment in the closing weeks of the legislative session that carves out a loophole to eliminate the requirement that spousal assets be disclosed now has an answer. Huffman’s amendment was about Joan Huffman and giving her cover for an ongoing violation of state law.

If Governor Abbott signs the bill containing the Huffman amendment into law, state officials will be able to hide assets through their spouses, opening a massive loophole for lawmakers to engage in conflicts of interest by accepting gifts and income sources in the name of a husband or wife. No one should think it won’t happen. Former State Representative Linda Harper-Brown drove a luxury Mercedes-Benz provided by a lobbyist, but registered in the name of Harper-Brown’s spouse.

See here for the background on Huffman’s amendment and here for the Chron story. This is happening as several members of the Texas Ethics Commission have stated that the Lege took a step backward on ethics reform and enforcement – despite Greg Abbott making “ethics reform” an emergency item for them – and sent a letter to Abbott urging him to veto the bill that contains Huffman’s amendment; they had favored the bill before she stuck that amendment in.

Normally this sort of thing doesn’t amount to much overall. Complaints get filed all the time, and many of them are over small disputes and minor violations. When it becomes a problem is when there is a perception that there’s pervasive corruption. Think back to 2006 and all the scandals the national Republicans faced, and how it helped turn that election into a Democratic wave, built as much on lower Republican turnout (including here in Texas) than anything else. But now you’ve got Huffman, you’ve got Ken Paxton, you’ve got Rick Perry, you’ve got the escalating war against Michael Quinn Sullivan and his everflowing river of “dark money” – these things can add up, if they individually amount to something. The Republicans won’t even be able to blame it all on those dirty hippies in Travis County anymore, too. It all may come to nothing, or mostly to nothing, but if it doesn’t, I’d be a little worried about it if I were a Republican strategist. If the people start to think you’re all a bunch of crooks, that more than anything can help spur a change. The Press has more.

Bill to kneecap Public Integrity Unit gets unstuck

And away it goes.

Sen. Joan Huffman

Senate Bill 10, filed by Sen. Joan Huffman, R-Houston, passed on second reading along party lines. The integrity unit is currently a state-funded division of the Travis County DA’s office that investigates public corruption, insurance fraud and tax fraud. Some Republicans have said the unit has had partisan motives for its prosecutions.

SB 10 must be voted on one more time before it passes from the Senate to the House.

In addition to moving the public integrity unit from the Travis County DA’s office, the bill would allow lawmakers and state employees to face prosecution in their home counties for alleged crimes committed in Travis County. On Wednesday in the Senate, Huffman said the public had lost confidence in the unit.

“I firmly believe it will be a better process, and there will be more accountability,” Huffman said.

The bill had originally put the unit under the attorney general’s office, but a substitute to the bill removed the AG’s office from the process and gave the Texas Rangers sole authority to pursue investigations.

Sen. Kirk Watson, D-Austin, said the bill gave lawmakers a special privilege of facing prosecution in their home counties.

“I believe this bill has created a special class of people that has the opportunity to go back to their hometown county, hometown judge and hometown prosecutor,” Watson said.

He also said the bill could allow lawmakers to face their prosecution in any county where they own property. Huffman said that was not the bill’s intent.

See here and here for the background. Via the Chron, we now know who the holdouts were.

Disagreement over having the Attorney General involved in the investigation and prosecution of cases, and the issue of prosecuting the violations in the counties where they occurred, had stalled the passage of Senate Bill 10 for more than two weeks.

With Sens. Kevin Eltife, R-Tyler, and Kel Seliger, R-Amarillo, and all Senate Democrats opposed to the anywhere-but-Austin prosecution exception for statewide officeholders, lawmakers and lobbyists, Huffman had been unable to get her bill called up for a vote by the full Senate.

Seliger last week had proposed allowing the Texas Rangers to investigate all cases, and to have a special prosecutor appointed by the chief justice of the Texas Supreme Court handle any charges filed.

Opponents of Huffman’s original bill said the revised plan would not solve the issue of sending cases to the home counties of politicians and lobbyists, where they are more likely to get favorable treatment.

“This perpetuates the problem, because now you will move these cases back in a home county where a courthouse cabal will not go after a state rep or other official because they are part of that local group,” said Tom Smith, Texas director of Public Citizen, a government-watchdog group. “They will have every reason to protect one of their own.”

I’m still a bit unclear on the details – was the special prosecutor bit still included or not? I suppose a system like that could work, jerry-rigged as it is. It’s just that the more moving parts you add, the more likely something will gum it all up. Of course, that would be considered a feature, not a bug. RG Ratcliffe, who isn’t a big fan of the current system, lays out his objections to the proposed one.

Merely turning ethics investigations over to the Texas Rangers is an almost equally bad idea. The governor appoints Texas Public Safety Commission. The current director of DPS was an aide to Governor Rick Perry before taking the top job at DPS. Through a governor’s influence over the public safety commission, a governor could halt or prompt almost any investigation. Imagine an unscrupulous governor bending legislators to his will by threatening to have their campaign accounts investigated. This is as bad a public policy as leaving ethics investigations in the office of one elected district attorney in heavily Democratic Travis County. Besides, I’d rather have the Texas Rangers chasing drug dealers, murderers and other crimes that endanger the public’s safety.

Seliger’s idea has some merit in that it allows the Supreme Court chief justice to name a special prosecutor, but it still involves the Texas Rangers and the political influence a governor can bring to the case. The federal experience also has shown that special prosecutors don’t seem to believe they’ve done their job unless they indict someone.

Probably the best course would be to finally give the Texas Ethics Commission some real powers to investigate and enforce the state’s ethics laws and election codes. As the Texas Tribune reported last week, at least one member of the commission is frustrated by how little power the commission actually has.

But if you are looking for a means of spreading the concentration of power involved in ethics investigations, the commission is a pretty good start. The commission consists of two appointees by the House speaker, two by the lieutenant governor, and four by the governor. Properly funded and authorized, the commission staff could investigate complaints and make recommendations for civil or criminal cases to the full commission. The commission could then decide whether to refer criminal cases to the Texas Supreme Court, which in turn could name a special prosecutor. Allow the court to also establish the county of venue for the prosecution, excepting the counties within the district of the accused offending politician.

Yeah, well, there’s no way they’d want to empower the TEC. The great irony here is that the Rick Perry case, which was the catalyst for all this, was driven by a special prosecutor appointed by a Republican judge. Be careful what you wish for, I guess. More from Ratcliffe here.

The odds never favor ethics reforms

Better to keep your hopes down and not suffer too much disappointment.

BagOfMoney

Gov. Greg Abbott pledged on the campaign trail to lead the charge to improve the state’s ethics laws, and now lawmakers and advocates pushing for reform are looking to the newly elected governor to help breathe life into proposals at the Legislature.

Lawmakers of both parties at the state Capitol talk a big game when it comes to strengthening laws aimed at rooting out corruption or providing more transparency to the public. That mostly has amounted to lip service, advocates of open government say, as substantive ethics reform has continually been curbed.

This session, efforts again will include attempts to require disclosure of contracts elected officials and their families have with the public sector, to make lawmakers’ personal financial statements available online, and to slow down the revolving door of lawmakers leaving office and immediately becoming lobbyists. All have failed previously.

There also are plans to propose legislation addressing secret campaign donors.

And a package of ethics measures Abbott laid out on the campaign trail, from putting more teeth into conflicts-of-interest statutes to beefing up campaign finance reporting requirements, are expected to get serious attention this session.

“Gov. Abbott made this a large part of his campaign for a good reason,” said state Rep. Giovanni Capriglione, a second-term Republican from Southlake. “People are afraid that somehow we’re working on things that could enrich other politicians.”

[…]

Tom “Smitty” Smith of watchdog group Public Citizen Texas said he remains cynical about what actually will come to fruition, noting Abbott’s plan did not include any mention of so-called “dark money” – political contributions in which the donor is not disclosed.

“Abbott has clearly signaled he wants to do some sort of ethics reform,” Smith said. “It’s more of a matter of, what is a reform?”

Bet the under, that’s my advice. It’s not even all on Abbott, to be honest, but more about the MQS mafia. Of course, they’re big backers of Abbott, who I expect will be honest enough to stay bought. Even if some form of ethics reform gets through, kneecapping the Public Integrity Unit and trimming funds for the Texas Ethics Commission will ensure that any new rules will be largely unenforceable anyway. So stay pessimistic, but hope for the best.

New frontiers in residency requirements

Michael Quinn Sullivan lives exactly where he says he lives, no more and no less.

Not Michael Quinn Sullivan

Empower Texans President Michael Quinn Sullivan and the Texas Ethics Commission are scheduled to tangle in state district court in Denton County for the first formal hearing in Sullivan’s appeal of a commission ruling charging him with flouting the law by failing to register as a lobbyist.

The commission and Sullivan have been sparring over the issue since 2012, when state officials launched a probe after sworn complaints by state Rep. Jim Keffer, R-Eastland, and former state Rep. Vicki Truitt, R-Keller. They accused Sullivan of directly lobbying members of the Texas House in the last quarter of 2010 and during the 2011 legislative session and failing to register with the state.

In July, the commission issued Sullivan a blistering final order and a $10,000 fine.

Not long after, Sullivan publicly proclaimed he was moving from Austin to “somewhere that respects the rule of law.” He later announced Denton as his new residence and filed an appeal there, instead of in Travis County.

State law allows for the appeal of an ethics ruling to be filed in Travis County or the county in which the respondent resides.

The commission, however, is fighting Sullivan’s claims that he resides in Denton County and is asking for the case to be transferred to Travis County.

The commission, in court documents, cited the fact that Sullivan has lodged multiple lawsuits in Travis County against the state agency and that its ruling was issued while Sullivan indisputably lived in Austin.

The commission also argued Sullivan has provided no evidence to show he is living in Denton and claimed residency there only after state officials concluded he failed to register as a lobbyist.

I kind of love this story, because it involves one of the few people in Texas that can give Dave Wilson a run for the “most loathsome political figure” title, and just like Wilson it involves an argument about residency and a private investigator sent to sniff out the truth. In this case, the private eye had better luck than the one who had the duty of staking out Wilson’s warehouse. I am sufficiently inspired by this to declare that I am changing my name to Heisenberg and my residence to everywhere and nowhere at once, depending on my circumstances and whether or not anyone is asking. Why shouldn’t I be allowed to beat the system, too? Anyway, Monday’s hearing was postponed till February 18, so we’ll have to wait a little longer to see where The Man says that MQS lives. This is exactly why Molly Ivins called politics the finest form of free entertainment ever devised. Texas Politics has more.

Abbott’s actions in the Hecht ethics case belie his “just doing my job” evasion

More accurately, it’s his lack of action that speaks clearly about his priorities and discretion.

Still not Greg Abbott

Attorney General Greg Abbott, accused of favoritism in his handling of an ethics case involving a Texas Supreme Court justice, says it’s not his duty to press the case that has sat idle for two years.

That reasoning, however, doesn’t stand up, according to an American-Statesman review of state law.

The issue began in 2008, when the Texas Ethics Commission fined Chief Justice Nathan Hecht $29,000 for violating campaign finance rules by getting a $167,200 discount on legal fees. Hecht appealed to Travis County district court, arguing that the agency misinterpreted state law.

With Abbott’s office defending the Ethics Commission, several years of sporadic action followed — until all activity ceased two years ago.

Defending the inactivity, an Abbott spokesman last week said his office wasn’t motivated to press the case because the ruling against Hecht remained in force — placing the onus to act on the chief justice.

But state law says otherwise.

The moment Hecht filed his appeal, the Ethics Commission judgment against him was vacated — or rendered void — to allow a Travis County district judge to conduct an independent review of the charges against him.

Legally, there is no judgment in place against Hecht, placing the onus to act on lawyers with the attorney general’s office.

[…]

Buck Wood, an Austin lawyer specializing in election law — mainly representing Democrats — said appeals of Ethics Commission rulings are rare, but the result is the same in every case.

“Once they appeal it, no enforcement action can be taken because it does vacate the decision,” Wood said. “The ethics fine is basically put on hold, and if (Abbott) doesn’t prosecute it, it’ll never get prosecuted.”

The inactivity is even harder to explain because Abbott’s lawyers believe Hecht’s appeal was improperly filed and should be tossed out.

A motion to dismiss the appeal, filed by the attorney general’s office in June 2012, argued that Hecht lawyer Steve McConnico failed to ask the Ethics Commission to reconsider its judgment against Hecht — a necessary first step before an appeal can be pursued in district court.

McConnico filed a brief rebutting the claim, and the last activity in Hecht’s appeal came in October 2012, when both sides filed responses trying to poke legal holes in each other’s arguments.

See here for the background. The 2012 filings weren’t included in the timeline of events put together by Texans for Public Justice, who has filed suit to toss Abbott off the case and appoint a special prosecutor that will actually do something, but the overall point stands. Nothing can or will happen in this case until one side or the other takes action, and since Team Hecht has no incentive to do anything – he’s in the clear for the time being, after all – that means Abbott needs to quit jerking around and do his job. Keep that in mind the next time you hear Abbott piously muse about how pursuing endless appeals of same sex marriage rulings and the like are “just doing his job”.

TPJ files suit against Abbott over Hecht ethics case

Here we go again.

An Austin legal watchdog group filed suit Wednesday to force action on a $29,000 ethics fine, levied against Texas Supreme Court Chief Justice Nathan Hecht in 2008, that has languished on appeal for 5½ years.

The motion from Texans for Public Justice seeks to remove Attorney General Greg Abbott from the case, saying Abbott has violated his legal duties by failing to pursue the case on behalf of the Texas Ethics Commission, which levied the fine.

“(Abbott) has helped his friend, former colleague and political ally by allowing the case to be inactive and dormant,” the motion said.

[…]

In Wednesday’s motion to intervene in Hecht’s appeal, Texans for Public Justice asked the court to disqualify Abbott, Republican candidate for governor, as the lawyer representing the ethics commission.

“By permitting, aiding and abetting, and acquiescing in almost six years of delay, Attorney General Abbott has violated his fundamental constitutional and statutory duties to ‘defend the laws’ of Texas and ‘represent the state in litigation’ … and he has failed to collect the fine that should have been collected years ago for the benefit of Texas taxpayers,” the motion said.

See here for a bit of background. The TPJ press release fills in the details.

Hecht’s troubles date to the short-lived 2005 nomination of his ex-flame Harriet Miers to the U.S. Supreme Court. Hecht’s promotion of Miers to conservative groups and the media drew a Texas Commission on Judicial Conduct rebuke for violating state prohibitions on political activism by jurists. Arguing that the First Amendment trumps judicial canons, Hecht attorney Chip Babcock overturned the admonishment in 2006.

Hecht’s victory spawned new ethical issues. The Texas Ethics Commission ruled that Babcock’s discounted legal fees amounted to an in-kind contribution to Hecht worth $100,000. Hecht failed to report this contribution, which exceeded judicial campaign limits. Following a rare formal public hearing, commissioners ordered Hecht to pay a $29,000 fine on December 11, 2008. Justice Hecht appealed to a Travis County court on January 27, 2009 and the Attorney General quickly filed a response on behalf of the Ethics Commission. Since those filings in early 2009, the case has languished. Setting a record for the longest appeal of a state ethics fine, the case runs the risk of being dismissed for lack of prosecution.

“Abbott has a duty to prosecute this cold case and collect from Justice Hecht,” said TPJ Director Craig McDonald. “Instead, he has sat on his hands for six years to protect a friend and political crony. Texas law recognizes no crony exception. It’s time for Abbott to act—or to find someone who will.”

TPJ’s motion asks the district court to remove Abbott from the case if necessary and to impose appropriate sanctions for “his extraordinary and egregious pattern of inaction and neglect in apparent deference and favoritism toward his friend and former colleague.”

TPJ’s filing argues that Abbott’s inaction violates provisions of the Texas Rules of Judicial Administration, Texas Disciplinary Rules of Professional Conduct, Texas Lawyers Creed and statutory and constitutional obligations of the Attorney General to promote the timely administration of justice. Abbott’s office, which has absolute discretion to aggressively pursue such matters, claimed in 2014 that plaintiff Hecht alone is responsible for advancing the case. Were this true, any defendant could beat any Ethics Commission rap simply by filing an appeal and then ignoring it.

I noted the five-year anniversary of the case last December. I get that TPJ could have timed the filing of their complaint differently, but come on. Abbott has time to file a zillion lawsuits against the federal government while simultaneously defending losers like the same sex marriage ruling, the school finance ruling, and the voter ID ruling, but he can’t assign a junior attorney or two to push some paper on this? His priorities as AG have always been the interests of the Republican Party first, and everything else second. There’s really no excuse for this. You can see the complaint TPJ filed here, the Ethics Commission order against Hecht from 2008 here, and their timeline of events here.

Empower Texans could have some tax problems

Schadenfreude alert:

BagOfMoney

Empower Texans, an organization at the center of the state’s far-right conservative movement, reported no political expenses on its 2012 tax returns to the Internal Revenue Service, despite showing $350,000 in campaign expenditures to state authorities, documents show.

The group, which claims to support fiscal responsibility and greater transparency in government, is best known for funding challengers going after Republicans it believes are too moderate, such as House Speaker Rep. Joe Straus, a San Antonio Republican.

“That is a very serious discrepancy, because it tends to suggest – it’s not, obviously, definitive – but it tends to suggest that the (tax return) was completed in a way that is knowingly incorrect,” said Marcus Owens, who was the director of the division of the IRS that oversees tax-exempt organizations from 1990 through 2000. “Absent some cogent and persuasive explanation of those two, that strikes me as potentially a criminal problem and certainly a civil problem.”

Another attorney well-versed in the IRS’ rules and procedures for nonprofits was equally critical.

“To the degree they are filing reports with the state ethics commission showing political spending, and they’re not showing them on their (tax returns), I find that questionable,” said John Pomeranz, a Washington D.C.-based attorney, who specializes in the law governing lobbying and political activity by nonprofits. “I’m trying to think of a way that could be justified, but I don’t really think it can be.”

[…]

Empower Texans’ nonprofit status makes its tax returns public record. Information from the tax returns reviewed from 2008 until 2012 also raises questions about whether the group has used an affiliated nonprofit, the Empower Texans Foundation, to improperly subsidize its political activity.

According to those records, Sullivan’s salary at Empower Texans fell greatly after the Empower Texans Foundation was created. However, the pay he received from the foundation more than made up the difference. In 2009, the year before the foundation was established, Sullivan made $99,600 in 2009, working 60 hours a week, serving as the president of Empower Texans.

However, in 2011, he made only $38,842 (about $19 an hour), as Empower Texans’ president. But he made $81,600 (roughly $78 an hour) serving as a director on the foundation’s board, tax returns show.

The pattern repeated itself in 2012: Sullivan, again listed as Empower Texans’ president, made $45,633 there, while earning another $81,600 from the foundation.

“That definitely suggests the (foundation) is subsidizing (Empower Texans), and the IRS doesn’t like that,” Pomeranz said.

While the IRS allows affiliated nonprofits to share staff and other costs, it requires that each organization carry its own weight, Owens said. He added that failure to do that could endanger the foundation’s tax-exempt status.

The tax returns, known as 990s, have come into the spotlight as the Ethics Commission considers adopting rules that would require nonprofits, like Empower Texans, to report their donors if at least 25 percent of their expenditures are “politically motivated.”

I know, it’s hard to believe that anyone as honest and forthright as Michael Quinn Sullivan could be playing fast and loose with the rules. Clearly, we need a nice, long, thorough investigation to get to the bottom of this.

Abbott files complaint with Ethics Commission over Davis book tour

Whatever.

Sen. Wendy Davis

Sen. Wendy Davis

The campaign manager for GOP gubernatorial candidate Greg Abbott filed an ethics complaint on Thursday alleging that the book tour of Abbott’s Democratic opponent, state Sen. Wendy Davis of Fort Worth, represents a conversion of political contributions into personal use.

Wayne Hamilton’s complaint to the Texas Ethics Commission claims that Davis converted political contributions to personal use — a violation of the state’s election code — during a trip to New York City this week where she both promoted her book and made a campaign stop.

The campaign filed a request for a formal opinion on the matter from the Texas Ethics Commission earlier this week; a response could take several months.

Davis’ campaign says she used campaign funds to pay for the airfare to and from New York City, while Davis’ book publisher paid for lodging on Sept. 9. A campaign event was held on Sept. 10.

“We were very careful to follow all legal guidelines,” campaign spokesman Zac Petkanas said. “One way you can tell this is a politically motivated and frivolous complaint is that the Abbott campaign filed it today without waiting for the legal opinion they requested on Monday.”

To be perfectly fair, it should be noted that the request for an opinion was about whether the book tour constituted an illegal corporate campaign contribution, whereas this is about whether Davis personally benefited from the use of campaign funds. That doesn’t mean this isn’t frivolous, but it is at least a different topic. The Texas Election Law Blog provides a useful insight on the original matter. As for this one, I’m not a campaign finance expert, and none of the stories I’ve seen so far have asked anyone who is for their opinion. Anyone out there with actual experience want to take a crack at this?

One more thing:

Several months ago, the commission publicly condemned political campaigns’ use of publicizing complaints they made against an opponent.

Wouldn’t want for these complaints to be publicity stunts, would we? Trail Blazers and the AusChron have more.

Abbott claims Davis’ book tour constitutes an illegal campaign contribution

I guess he has to do something to distract from what’s actually in Sen. Davis’ book.

Sen. Wendy Davis

Sen. Wendy Davis

Republican gubernatorial nominee Greg Abbott asked the Texas Ethics Commission on Monday to rule whether opponent Wendy Davis’ book deal and tour crosses the line on illegal corporate campaign contribution because it is tied to her ongoing campaign.

Davis’ campaign immediately labeled the filing a “frivolous stunt.”

In a three-page letter requesting an advisory opinion, Abbott campaign manager Wayne Hamilton asked whether a book tour paid for and promoted by a corporation constitute in-kind political contributions. Under state law, corporate contributions to a campaign are illegal.

[…]

“Because of the proximity of the book’s publishing and the election, the candidate will be using political funds on voter contact at the same time the publisher is using corporate funds to promote the book,” reads the letter, insisting that political observers “seem to agree that the promotion of the book essentially equals promotion of the candidate’s candidacy.”

The letter also seeks an opinion on how royalties from a book should be reported. Davis earlier made public her tax returns from last year that show she received a $132,000 advance from the book, with $100,000 in expenses.

The release of the book comes just eight weeks before the November general election, where polls show Abbott still holds a lead.

Ethics Commission officials have said they do not comment on opinion requests. But Executive Director Natalia Luna Ashley said that unless the questions have been previously answered, or the law is clear on an issue, an answer could take several months.

“It depends on the complexity,” she said.

Davis’ campaign spokesman Zac Petkanas said the campaign was “very careful to follow every legal guideline.

“This frivolous stunt by the Abbott campaign is the clearest sign yet how worried they are about the power of Wendy’s story,” he said.

This may be the first time in history that a Republican politician in Texas has been concerned about the effect of corporate money in an election. Perhaps Greg Abbott should ask Michael Quinn Sullivan or Tom DeLay what they think about this. I seriously doubt it will amount to anything, but if it does we won’t hear about it till after the election anyway.

Shine a light on dark money

I totally favor this.

BagOfMoney

Secret campaign donors in Texas may soon be forced out of the shadows.

The Texas Ethics Commission, already fighting a conservative group in court over whether it can regulate dark money disclosure, appears poised to approve a proposal aimed at requiring some politically active nonprofits to start revealing their anonymous donors.

The eight-member commission rolled out a draft proposal Thursday, signaling how the state campaign finance regulator plans to move forward on tackling the growing concern over secret campaign spending in Texas elections.

Under the draft regulation, the commission would require a nonprofit to start disclosing donors if 25 percent or more of the group’s expenditures can be classified as politically motivated. It also would require disclosure if political contributions account for more than 25 percent of the group’s total contributions in a calendar year.

“We’re tying to figure out how we get to the public information about who is contributing to candidates,” said commission Chairman Jim Clancy, appointed by Gov. Rick Perry.

Separately, the commission on Thursday clarified that dark money groups may spend up to 20 percent of their revenue on politics without having to disclose donors.

The commission referred to it as a safe harbor, of sorts, in an opinion that represents one of the first concrete pieces of guidance provided to campaign finance lawyers since a landmark U.S. Supreme Court ruling in 2010 allowed corporations to spend unlimited sums on electioneering.

As I’m sure you know, I am all in favor of more disclosure. I honestly don’t understand the argument against it, though I’m aware that the courts don’t necessarily share my view. The usual anti-transparency suspects are kicking up the usual fuss and threatening to take this to court, where they unfortunately will have a good chance of prevailing. It’s still the right thing to do, and who knows? Maybe some day we’ll have better judges. Texas Politics has more.

Davis outraises Abbott on the 8 day report

Nice.

Sen. Wendy Davis

Sen. Wendy Davis

Democrat Wendy Davis reported that she outstripped Republican Greg Abbott in fundraising, bringing in $2.85 million over a 29-day period. His totals were reported here.

Davis has $11.3 million tucked away looking ahead to the general election. Her overall bank account still lags well behind Abbott’s $30 million.

The Republican attorney general has seen his campaign boosted in the past seven months by about two dozen benefactors capable of writing him large checks totaling more than $100,000.

For Davis, her totals arise from combining three political accounts controlled by her campaign. Those most recent totals include:

Wendy R. Davis for Governor, Inc.: $1.6 million
Wendy R. Davis Candidate/Officeholder: $2.035 million
Texas Victory Committee, Inc.: $1.2 million

Fundraising reports are not yet on the TEC website; check back later today or tomorrow here to search for them. This is a great bounceback from the 30 day report, and means as BOR has noted that Davis has outraised Abbott in two of the three reporting periods, as she topped him in January as well. Sure, he has more cash on hand, but the point is that she can more than keep pace, and she has a much broader network of donors to tap into, not just a handful of zillionaires. There’s a long way to go and a whole lot of work to do, so it’s great to be reassured again that Davis will have the resources she will need to fight this out.

The oldest established permanent floating ethics probe in the state

The Chief Justice of our State Supreme Court, ladies and gentlemen.

Nathan Hecht

Texas Supreme Court Chief Justice Nathan Hecht, already the longest-serving member of the state’s highest civil court, has the dubious distinction of owning another record: the longest running appeal of a state ethics fine.

With the case dragging into its fifth year, watchdog groups are pointing the finger at Attorney General Greg Abbott for not pressing harder in court for a final resolution.

[…]

Hecht’s case is set to reach its fifth anniversary in Travis County District Court next month, making it by the far the longest-running legal challenge over an ethics panel fine in the agency’s roughly two-decade history.

“This whole matter has been swept under the rug for years and years without any resolution,” said Alex Winslow, director of Texas Watch, which monitors the state Supreme Court and filed the ethics complaint against Hecht. “Greg Abbott has the full discretion for pursuing this case and reaching some resolution for it and for whatever reason he’s opted not to do that.”

[…]

On Tuesday, Abbott’s office said it is not its responsibility to speed the ethics appeal along. That falls on Hecht’s shoulders, according to the Abbott’s office, since he filed the case.

“These watchdog groups’ claims make no sense because, to the extent the case is not advancing quickly, the result is that the attempt to overturn the Ethics Commission’s ruling is not advancing,” Abbott spokesman Thomas Kelley said in a statement.

The watchdog groups, however, said the case has seemingly fallen off the radar for both sides: it has sat dormant for more than a year, with not a document filed since October 2012. That marks the second time the case has gone at least 12 months without so much as a single filing.

With the ethics case hanging overhead, Hecht won re-election in 2012 to the Supreme Court and recently was sworn in for the promotion to chief justice.

“It gets more important every day now. Texans need to know whether the ruling of the Texas Ethics Commission that Hecht violated the law is valid,” said Craig McDonald, director of the watchdog group Texans for Public Justice, which filed the ethics complaint against Keller that resulted in a $25,000 settlement.

“It’s the burden of the attorney general to prosecute the case and from the outside it looks like the attorney general’s office has thrown this case in a dusty file cabinet.”

Abbott’s excuse for doing nothing is mighty convenient when you stop and think about it. As long as Hecht’s appeal is pending, he’s not on the hook for anything. It’s only once his final appeals have finished running their course that he might have to write a check. True, he might beat the rap, but why take the chance if there’s no pressure on him to ever bring this thing to a close? If Greg Abbott has no interest in pursuing a resolution, why should Nathan Hecht? The status quo suits him just fine, thank you very much. Burka, who suggests a way out of this, has more.